Civil Liability Limitation Calculator for Tanker Oil Pollution
(United Kingdom)
Based on the CLC 1992 (as amended in 2000), Fund Convention 1992 (as amended in 2000), and Supplementary Fund Protocol 2003 as adopted and currently in force in the UK via Chapters III and IV, Schedule 5 Part I, and Schedule 5ZA of the UK Merchant Shipping Act 1995.
Tonnage is the gross tonnage calculated as prescribed by order of the Secretary of State (s. 157(4)).
Calculation Results:
Cases:
Summaries of cases. The cases are generally on CLC, Fund Convention and Supplementary Fund Protocol, decided by the UK courts, following the law, limits, the version of respective Convention, and domestic modifications to them, applicable there at that time. They are only for purposes of learning the general principles, and not to determine any specific law or limit.
Important Notes:
This calculator is based strictly on the provisions of Chapters III and IV, Schedule 5 Part I, and Schedule 5ZA of the Merchant Shipping Act 1995.
All limits are stated in Special Drawing Rights (SDR). Use the IMF SDR Valuation tool to convert SDR to a desired currency.
Tier 1 - Shipowner's Liability (Chapter III, s. 157):
For a ship up to 5,000 tons, the limit is 4.51 million SDR.
For a ship over 5,000 tons, the limit is 4.51 million SDR plus 631 SDR for each additional ton, up to a maximum of 89.77 million SDR.
Tier 2 - 1992 Fund Convention (Chapter IV, s. 176 & Sch. 5): This fund provides additional compensation. The total compensation available under both the shipowner's liability (Tier 1) and this fund is aggregated.
The standard aggregate limit is 203 million SDR.
A higher aggregate limit of 300.74 million SDR applies if three State Parties to the convention have combined contributing oil receipts of 600 million tons or more in the preceding year.
Tier 3 - 2003 Supplementary Fund (Chapter IV, ss. 176A, 176B & Sch. 5ZA): This fund provides a third tier of compensation. The total sum available across all three tiers (Shipowner, 1992 Fund, and Supplementary Fund) shall not exceed 750 million SDR.
The owner's right to limit under s. 157 is lost if the incident resulted from the registered owner's personal act or omission, "committed with intent to cause such damage or cost... or recklessly and in the knowledge that any such damage or cost would probably result", and the burden of proof is on the person opposing the limitation (s. 157(3)). Note: This is a formidably high threshold for a person opposing the limitation to meet.
The tonnage for calculation is the ship's gross tonnage as prescribed by order (s. 157(4)).
UK has adopted the limits in the CLC 1992 (as amended in 2000) and the Fund Convention 1992 (as amended in 2000), and the Supplementary Fund Protocol 2003 - accessible here.
CLC 1992 [as amended in 2000] (UK Version) Notes:
STRICT LIABILITY
Liability of a "registered owner" of a "tanker" ship is "strict", subject only to s. 155 exception, for any occurrence of discharge or escape of persistent hydrocarbon mineral oil (other than bunker oil) from the ship (s. 153, 170).
The reference to a tanker ship is to a ship constructed or adopted for carrying oil in bulk as cargo, whether that is the only cargo or one of the cargoes that the ship is capable of carrying (s. 153(3)).
In the case of a ship capable of carrying cargoes other than oil in bulk, liability attaches only when the ship is carrying oil in bulk as cargo or whilst on a voyage following the carriage of such oil (unless the owner proves that no residue from the oil carriage remained in the ship) (s. 153(4)).
The liability - post-discharge/escape - is to compensate (a) for primary damage by contamination in the territory of the UK after the discharge or escape, (b) for costs of any measures reasonably taken to prevent or minimise the primary damage in the territory of the UK after the discharge or escape, and (c) for secondary damage caused in the territory of the UK by such measures taken (s. 153(1)). A claim is within the section when the damage results in the UK or costs are incurred to prevent or minimise such damage in the UK, even if the discharge or escape occured outside the UK (s. 156A(1)).
A liability - pre-discharge/escape - where an occurrence has happened but not a discharge or escape, and there is a grave an imminent threat of damage by contamination if a discharge or escape should happen, is to compensate for (a) for costs of any measures reasonably taken to prevent or minimise the potential damage in the territory of the UK, and (b) for secondary damage caused in the territory of the UK by such measures taken (s. 153(2)). A claim is within the section when the threatened damage would be in the UK or costs are incurred to prevent or minimise such threatened damage in the UK, while the threatened discharge or escape is outside the UK (s. 156A(1)).
Where an owner incurs the aforesaid post-discharge (s. 153(1)) or pre-discharge (s. 153(2)) liability in respect of a damage or a potential damage in the territory of the UK, the liability is extended in respect of damage or costs in the territories of any other CLC 1992 country. This extends the jurisdiction of the UK courts to hear the case of damage caused outside the UK, but only when the is also a damage caused in the UK (s. 166(2)).
Where two or more ships incur the liability as a result of an occurrence, the damage or cost falling on each of them cannot be reasonably be separated, each of them are liable jointly with the other or others for the entire damage or costs (s. 153(6)).
"Damage" is defined to include "loss" (s. 170(1)).
"Ship" means any "sea-going vessel or sea-borne craft of any type whatsoever" (s. 170(1)).
References to "territory" of a country include the territorial sea of the country AND its exclusive economic zone (EEZ) (s. 170(4)).
EXCEPTION TO LIABILITY
Liability is excepted where the discharge/escape or the relevant threat of contamination (a) resulted from an act or war, hostilities, civil war, insurrection or an exceptional, inevitable and irresistible natural phenomenon, (b) was due wholly to anything done or omitted to be done by another person, not being a servant or agent of the owner, "with intent to do damage", or (c) was due wholly to the negligence or wrongful act of a government or other authority in exercising its function of maintaining lights or other navigational aids for the maintenance of which it was responsible (s. 155(2)). The burden of proof is on the owner (s. 155(1)).
EXCLUSIVILITY OF SECTION 153 LIABILITY
The owner will not be liable in respect of a discharge/escape or a relevant threat of contamination otherwise than pursuant to s. 153, irrespective of he is liable under s. 153 (s. 156(b)(i)).
No other person will be liable for the discharge/escape (ss. 156(1)(b)(ii) and (2)). The reference to "other person" is to (a) any servant or agent of the owner, (b) any person employed or engaged in any capacity on board the ship or to perform ay service for the ship, (c) any charterer (of any type including but not limited to bareboat charterer), manager or operator of the ship, (d) salvors operating with the consent of the owner or on instructions of a competent public authority, (e) any person taking the measures to avoid or minimise the damage (under s. 153(1)(b) or a potential damage (under s. 153(2)(a)), and (f) any servant or agent of the said charterer/manager/operator, the said salvor, or the one taking the said measures (s. 156(2)).
RESTRICTIONS ON CLAIMS FOR IMPAIRMENT OF ENVIRONMENT
This may only be claimed under the head of (a) resulting loss of profit or (b) the costs of reasonable measures taken or to be taken for instatement of the environment (s. 156(3)).
CONTRIBUTORY NEGLIGENCE OF CLAIMANT
The right of the owner to raise the defence of contributory negligence against the claimant is preserved. The Law Reform (Contributory Negligence) Act 1945 will apply as if the liability of the owner arose from negligence, for the purposes of application of the 1945 Act (s. 156A(2)).
LIMITAION OF LIABILITY
Owner has a right to limit his liability.
The limit for ships not exceeding 5,000 tons (gross tonnage [s. 157(4)]), the limit is 4.51 million SDR. For ships exceeding 5,000 tons, the limit increases by 631 SDR per ton above 5,000 tons. The maximum liability is capped at 89.77 million SDR (s. 157).
The owner loses his right to limit if the liability arose as a result of "anything done or omitted to be done by [him] either with intent to cause any such damage or cost ... or recklessly and in the knowledge that any such damage or cost would probably result." (s. 157). The burden is on the substantive claimant (i.e., the person opposing the limitation) Note: This is a formidably high threshold for the substantive claimant to prove.
LIMITAION DECREE, FUND ESTABLISHMENT, DISTRIBUTION
Limitation is not automatic, but the owner must apply to the court for the limitation (s. 158(1)).
When making the limitation decree, if the court finds the owner is liable, the court will direct the owner to pay the limited amount into the court for distribution to the substantive claimants in proportion to their claims against the limited amount (s. 158(2)).
Only when the limited amount is paid into the court, the owner enjoys the relief from arrest of his ships or threat of arrest of his ships enforcement of any judgments made in respect of the liability (s. 159). Any ship arrested, if not already released, will be released upon the fund being paid into the court (s. 159). However, this does not affect the owner's liablity for costs (s. 159(1)(b)).
If the owner faces a corresponding liability in other CLC 1992 countries, in addition to the UK, he may establish the fund in any of those countries instead of paying into the UK court (s. 161).
An owner who has voluntarily made a reasonable sacrifice or taken any other reasonable measure to prevent or reduce the damage is entitled to a claim for that and obtain his proportion for that in the distribution (s. 158(6)).
A lien or an in rem right of a claimant over the ship does not affect the proportion that he would receive (s. 158(8)).
The court may postpone the distribution to allow space for claims that may be established later in any court outside the UK (s. 158(7)).
Substantive claims must be made within such time as the court may direct or such further time as the court may allow (s. 158(4)).
TIME LIMIT FOR SUBSTANTIVE CLAIMS
Substantive claims are extinguished three years after the claim arose OR six years after the occurrence/first of the occurrences resulting in the discharge/escape, whichever is earlier. Otherwise the claim is extinguished (s. 162).
COMPULSORY INSURANCE AND RIGHTS OF THIRD PARTIES
Any ship carrying in bulk a cargo of more than 2,000 tons of the relevant oil may not enter or leave a port in the UK or arrive at or leave a terminal in the territorial sea of the UK, unless there is in force a certificate of insurance in place (s. 163).
The certificate must be issued by the relevant governmental authority in the place where the ship is registered in the case of a CLC 1992 country. In the case of a ship registered in a non-CLC 1992 country, the certificate may be issued by any CLC 1992 country (s. 163).
The certificate must be carried on board the ship (s. 163). Note: the certificate is issued by the relevant governmental authority upon production of the Blue Card (i.e., proof of insurance cover issued by the insurer) by the owner to the authority.
A judgment obtained against an owner from a court in a foreign CLC 1992 country under a provision corresponding to s. 153 may be enforced in the UK under the scheme of the Foreign Judgments (Reciprocal Enforcement) Act 1933 with some modifications and irrespective of whether that country is a reciprocal country recognised within the scheme of the 1933 Act (s. 166(4)).
GOVERNMENT SHIPS - MODIFICATION
Warships and ships used by any State for non-commercial purposes are exempted from s. 153 strict liability (s. 167(1)).
Ships owned by a State and for the time being used for commercial purposes, the requirement of certicate based on insurance is modified for a certificate by the State that the ship is owned by it and that the State will meet any liability for pollution to the limit set in the CLC 1992 (as amended in 2000) (s. 167(2)). Note: The limit set in CLC 1992 (as amended in 2000) is same as that set in s. 157.
It is deemed that the foreign State has submitted to the jurisdiction of the UK court for the purposes of a claim to which s. 167(3) applies.
RECIPROCAL ENFORCEMENT
Rights of an owner liable under s. 153 to bring recourse and indemnity are not affected by Chapter III.
Funds Convention [as amended in 2000] (UK Version) Notes:
WHO CONTRIBUTES?
Importers and receivers of crude and fuel oil must contribute to the Fund and the Supplementary Fund, if they imported/received more than 150,000 tonnes of oil in a year carried by sea from overseas to any port or terminal installation in the UK (s. 173).
For the above purpose, a group of company or amalgamated companies, wherever incorporated, is considered one entity (ss 173(6) and (10)).
The amount of contribution is as determined by IOPC Fund (s. 173(7).
LIABILITY OF THE FUND
The Fund is liable for "pollution damage" in the territory of the UK (and in certain circumstances beyond the territory of the UK) if the substantive claimant has been unable to obtain full compensation under s. 153 because (a) liability was excepted under s. 155(2), (b) the owner or the insurer could not meet its obligation in full, or (c) the damage exceeds s. 157 limit (i.e., CLC 1992 (as amended in 2000) limit) (s. 175).
Expenses reasonably incurred and sacrifices resonably made voluntarily by the owner to prevent or minimise pollution damage is considered a pollution damage which the owner is entitle to make a claim for against the Fund like other substantive claimants (s. 175(6)).
It is within the coverage of the s. 175 where the pollution damage results in the UK, even if the discharge or escape occurred outside the UK (s. 181(2)).
"Damage" is defined to include "loss" (s. 181(1)).
"Pollution damage" means (a) damage caused outside a ship by contamination resulting from a discharge or escape of oil from the ship, (b) the cost of preventive measures, and (c) further damage caused by preventive measures (s. 181(1)).
References to "territory" of a country include the territorial sea of the country AND its exclusive economic zone (EEZ) (s. 181(3) read with s. 170(4)).
EXCEPTION TO LIABILITY OF FUND
Liability of the Fund is excepted where the pollution damage (i) resulted from an act of war, hostilities, civil war or insurrection, or (ii) was caused by oil which has escaped or been discharged from a
warship or other ship owned or operated by a State and used, at the
time of the occurrence, only on Government non-commercial service (s. 175(7)(a)).
Liability of the Fund is also excepted where the claimant cannot prove that the damage resulted from an occurrence involving a ship identified by him, or involving two or more ships one of which is identified by him (s. 175(7)(b)).
A claimant may lose his right to claim against the Fund, if the pollution damage resulted wholly or partly (a) from anything done oor omitted to be done by him with intent to cause damage or (b) from his negligence (s. 175(8)). The burden of proof is on the Fund (s. 175(8)). However, this claimant-specific exception does not apply where the claim is for the costs of preventive measures or any damagge caused by such measures (s. 175(10)). Note: the "negligence"exception is a wide exception and protection for the Fund, subject the burden of proof being on the Fund, and subject to its non-application in cases mentioned in s. 175(10).
LIMITAION OF LIABILITY OF FUND
The liability of the Fund is automatically subject to the limits imposed by paragaphs 4 and 5 of Article 4 of the Fund Convention 1992 (as amended in 2000), which is set out in Part I of Schedule 5 of the MSA 1995. See the Important Notes above for the limits.
SUPPLEMENTARY FUND
Supplementary Fund is liable, materially, in the same way as the Fund is liable. The references to the "Fund 1992 countries" will be to the "Supplementary Fund 2003 countries" in the case of the Suppelementary Fund (s. 176A).
The liability of the Supplementary Fund is automatically subject to the limits imposed by paragaphs 2 and 3 of Article 4 of the Supplementary Fund Protocol 2003, which is set out in Schedule 5ZA of the MSA 1995.
PROCEDURE FOR INVOKING FUND'S/SUPPLEMENTARY FUND'S LIABILITY
The substantive claimant (or any other party) to a claim against an owner or an insurer may give a notice of the proceedings in writing to the Fund together with copies of the claim form and any statements of case served in the claim (CPR PD 61 paragraph 11.1).
A notice given to the Fund is deemed given also to the Supplementary Fund (CPR PD 61 paragraph 11.2 and s. 177(2)(a)).
The Fund and/or the Supplementary Fund may intervene in the claim by serving a notice of intervention on the owner, insurer and the court (CPR PD 61 paragraph 11.3). Even if no notice of claim was served on the Fund/Supplementary Fund, they may still intervene (CPR PD 61 paragraph 11.3)
Upon judgment against the Fund/Supplemantary Fund, the Registrar will send a stamped copy of the judgment to the Fund/Supplementary Fund (CPR PD 61 paragraphs 11.4 and 11.5).
The Fund/Supplementary Fund may not dispute the judgment once it has become final and enforceable, even if the Fund/Supplementary Fund had not intervened in the proceedings (s. 177(2)(b)).
Upon receipt of the judgment against the Fund, the Fund/Supplementary Fund will notify the court whether the claim amount is NOT to be reduced or to be reduced to a specified amount pursuant to the Fund/Supplementary Fund conventions limits (ss. 176(3) and 176B(2)). Section 177(5) makes similar provision in respect of enforcing Fund/Supplementary Fund convention countries registered in the UK.
A judgment may not be enforced against the Fund/Supplementary Fund without leave of the court, which will not be given until the Fund/Supplementary Fund gives the aforesaid notification (ss. 176(3) and 176B(2)). Section 177(5) makes similar provision in respect of enforcing Fund/Supplementary Fund convention countries registered in the UK.
A judgment obtained against the Fund or Supplementary Fund in a court in a foreign Fund or Supplementary Fund country under a provision corresponding to s. 175 or s. 176A, respectively, may be enforced in the UK under the scheme of the Foreign Judgments (Reciprocal Enforcement) Act 1933 with some modifications and irrespective of whether that country is a reciprocal country recognised within the scheme of the 1933 Act (s. 177(4)).
The Fund/Supplementary Fund may sue anbe sued in its own name or in the name of the Director of the Fund/Supplementary Fund (ss. 180(1) and (3)).
TIME LIMIT FOR CLAIMS AGAINST FUND/SUPPLEMENTARY FUND
An action to enforce a claim against the Fund/Supplementary Fund may not be brought, unless the action is commenced, or a third-party notice of action to enforce a claim against the owner/insurer is given to the Fund/Supplementary Fund, within three years after the pollution damage occured, and not later than six years after the occurrence/first of the occurrences resulting in the discharge/escape, whichever is earlier. (ss. 178(1), (2) and (3)).
Commencement of an action against the Fund is deemed commencing the action also against the Supplementary Fund (s. 178(4)).
SUBROGATION FOR AND AGAINST FUND/SUPPLEMENTARY FUND
The Fund/Supplementary Fund is subrogated to the rights in respect of the damage, for which it paid (ss. 179(1) and (1A)).
A public authority in the UK that pays compenation for pollution damage is subrogated to the right of compensation against the Fund/Supplementary Fund (s. 179(2)).
Chapter III (Liability for Oil Pollution) was included to implement CLC 1992 (now as amended in 2000) and to make certain other provisions in relation to oil pollution liability.
Chapter IV (International Oil Pollution Compensation Fund) was included to implement the Fund Convention 1992 (now as amended in 2000).
At the commencement of the Act, the effect of both Chapters III and IV was suspended, and transitional provisions in their place, respectively in Chapters III and IV of Schedule 4 of the Act, were brought into force (ss 171(1) and 182(1), respectively).
Chapter III is a self-contained set of provisions that implements the CLC 1992 (now as amended in 2000) as adopted in the UK. Chapter IV gives effect to the Fund Convention 1992 and the Supplementary Fund Protocol 2003, as adopted by the UK and found in Part I of Schedule 5 and Schedule 5ZA of the Act, respectively.
This calculator is for informational purposes only and does not constitute legal advice. We accept no responsibility for the calculation and the law stated here. Users must independently verify all information and consult with qualified legal professionals.